Exhibit 10.1

ASSIGNMENT AGREEMENT

THIS made this 5th day of August, 2004.

BETWEEN:

E-COM TECHNOLOGIES INC., a Nevada company whose address is Suite 1925, 200 Burrard Street, Vancouver, British Columbia, V6C 3L6 Canada

(hereinafter called “E-Com”)

OF THE FIRST PART

AND:

FORT SCOTT ENERGY CORP., a Nevada company whose address is 5548 Parthenon Place, West Vancouver, British Columbia, V7W 2V7 Canada

(hereinafter called “Fort Scott”)

OF THE SECOND PART

WHEREAS E-Com wishes to acquire from Fort Scott, and Fort Scott wishes to assign to E-Com, its interest in the Participation Agreement dated April 26, 2004 (the “Participation Agreement”) between Fort Scott and Cedar Strat Corporation, on the terms and conditions as described in this Agreement;

NOW THEREFORE this Agreement witnesseth that, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by E-Com and Fort Scott, the parties covenant and agree with each other as follows:

1.     DEFINITIONS

1.1     In this Agreement:

(a)

“accredited investor” has the meaning ascribed in Regulation D of the US Securities Act of 1933.

(b)

“Agreement” means this assignment agreement including all attached schedules;

(c)

“AMI” means the Area of Mutual Interest as set out in the Participation Agreement attached as Schedule “A” hereto;

(d)

“Assets” means the Petroleum and Natural Gas Rights and Leases currently held by Fort Scott via its wholly owned subsidiary Frontier Explorations Ltd. (Frontier), which for greater certainty are set out in Schedule “C” hereto;

(e)

“Asset Data” means all information, data and projections respecting the Assets as further defined in section 12.1 and all such other data as may be generated in respect of determining the potential for the existence of oil and gas on the Lands under the Participation Agreement;

(f)

“Closing” means the closing of the transactions contemplated in this Agreement;

(g)

“Closing Date” means August 6, 2004;

(h)

“Consideration Shares” means up to 10,000,000 common shares, subject to adjustment, in the capital of E-Com payable in instalments as set out in this Agreement;

(i)

“Frontier” means Frontier Exploration Ltd., a wholly owned subsidiary of Fort Scott;

(j)

“Lands” means the lands comprising the AMI;

(k)

“Leases” means collectively the leases, reservations, permits, licenses, or other documents of title held by Fort Scott via its wholly owned subsidiary Frontier Explorations Ltd. which are as set out in Schedule “C” hereto and have been acquired in the AMI pursuant to the terms of the Participation Agreement, including any renewals or extensions thereof, by virtue of which the holder is entitled to enter, access, drill for, win, take, own or remove the leased substances within, on or under the Lands;

(l)

“NRI” means a net revenue interest;

(m)

“oil and gas” includes all minerals and hydrocarbon substances regardless of gravity or phase (including coal and coalbed gas) including, but not limited to condensate, helium, hydrogen, nitrogen and other gases;

(n)

“ORRI” means an overriding royalty interest; and

(o)

“Petroleum and Natural Gas Rights” means the entire legal interest of Fort Scott in and to the Leases.

The following Schedules are attached to and form part of this Agreement:

Schedule “A” – Participation Agreement

Schedule “B” – Share Sale Agreement / Frontier Explorations Ltd.

Schedule “C”– List of Leases held by Frontier

Interpretation

1.3     The headings of the clauses of this Agreement are inserted for convenience of reference only and shall not affect the meaning or construction of the Agreement.

1.4    Whenever the singular or masculine or neuter is used in this Agreement, they shall be interpreted as meaning the plural or feminine or body politic or corporate, and vice versa, as the context requires.

1.5     If there is any conflict or inconsistency between the provisions of this Agreement and those of a schedule attached hereto, the provisions of this Agreement shall prevail. If any term or condition of this Agreement conflicts with a term or condition of any Lease, or the requirements of any governmental authority or agency having jurisdiction, then the term or condition of such Lease or governmental authority or agency shall prevail and this Agreement shall be deemed to be amended to the extent required.

2.     PURCHASE AND SALE

2.1     E-Com hereby agrees to accept an assignment of the Participation Agreement and the Leases from Fort Scott, excepting the 2% ORRI retained by Fort Scott in and to the Lands and all Leases currently held by Fort Scott thereon by Frontier, or hereinafter acquired directly or indirectly by E-Com thereon, and Fort Scott hereby agrees to the assignment to E-Com in consideration for; the issuance of 500,000 post consolidated common shares in the Capital Stock of E-Com on the execution of this agreement, and the reservation and issuance of the Consideration Shares, and the issuance of the Convertible Debenture set out in paragraph 2.2 hereof. In order to take receipt of the Consideration Shares, Fort Scott represents that it is, or at the time of the issuance of the Consideration Shares will be, an accredited investor and will execute and deliver a subscription form in the form and containing the terms customary for such type of form.

2.2     In consideration of Fort Scott transferring to E-Com the shares (the “Frontier Shares”) held by it in Frontier, and, as a result, the Leases held by Frontier as set out in Schedule “C” hereto, E-Com will issue to Fort Scott a Promissory Note and Convertible Debenture in the principal amount of $500,000 usd (the “Debt”). The Convertible Debenture will bear interest at a rate of 7% per annum and will further entitle Fort Scott, at its sole election, to convert payment of the principal amount and interest accruing thereon, in whole or in part, into Units of E-Com. The conversion rate under the Convertible Debenture will be set at $0.25 usd per Unit, each Unit entitling Fort Scott to the issuance of one common share in the capital stock of E-Com and one half of one warrant, with each whole warrant entitling Fort Scott to acquire one additional common share at $0.50 per share. Fort Scott shall be required to make its election to accept any payment of the Debt and any interest accruing thereon, in whole or in part, or to convert any such payment under the Convertible Debenture within 48 hours of Fort Scott being presented with payment of the Debt, in whole or in part, by E-com. As security for the payment of the Debt and interest accruing thereon, Fort Scott will retain ownership of the Frontier Shares until the Debt and all interest accruing thereon has been paid in full or such payment has been converted in to Units as the case may be.

3.     PAYMENT OF PURCHASE PRICE

3.1     The collective purchase price payable by E-Com to Fort Scott pursuant to clause 2 of this Agreement shall be paid as follows:

(a)

Consideration Shares: For each 10 million barrels of proven reserves on the Lands, E-Com will issue to Fort Scott 1,000,000 of the Consideration Shares, up to a maximum of 10,000,000 Consideration Shares;

(b)

Fort Scott’s retained 2%ORRI: Fort Scott will at all times retain and be vested with a 2% ORRI on the Lands, such that upon the fulfillment of the obligations set out and as otherwise described in the Participation Agreement, E-Com will have earned a 80.5% NRI in the Lands, and Cedar Strat will be vested with a 5% ORRI;

(c)

The issuance of 500,000 post-consolidated common shares in the Capital Stock of E-Com on the execution of this agreement, and the reservation and issuance of the Consideration Shares; and

(d)

A Convertible Debenture and Promissory Note in favour of Fort Scott in the principal amount of $500,000 usd at 7% per annum, convertible in accordance with paragraph 2.2 hereof.

3.2     As set out in the Participation Agreement and this Agreement, Fort Scott will, subject to the fulfillment of its obligations thereunder, be vested with a 82.5% ORRI in the Lands.

3.3     In consideration of, and upon the fulfillment of the obligations of Fort Scott under the Participation Agreement, all of which are to hereby assigned to and assumed by E-Com, and the performance by E-Com the terms and conditions of this Agreement, E-Com will become vested with a 80.5% ORRI in the Lands. Cedar Strat however retains a 5% back in working interest which may be adjusted upwards to as much as a 12.5% back in working interest should E-Com elect not to proceed with the drilling election as set out in the Participation Agreement.

4.     CONVEYANCE AND ASSIGNMENT OF LEASES

4.1     Upon payment of the Purchase Price, including either the payment of the Debt and all interest accruing thereon or the conversion of such Debt and interest under the Convertible Debenture, as the case may be, Fort Scott shall deliver to E-Com a share certificate in the name of E-com, representing 100% of the issued and outstanding shares in the capital of Frontier. Up to the time of such transfer E-Com shall do all such acts and pay all rentals and other payments as are required to keep the Leases in good standing. Up to the time of such share transfer Frontier will not, unless E-Com is in breach of the terms of this Agreement, otherwise sell, transfer or otherwise dispose of or encumber the Leases.

4.2      Subject to paragraph 4.1 hereof, Fort Scott shall also provide E-Com with any specific assignments, transfers or further assurances as E-Com may reasonably require to obtain title to any Leases or Assets purchased herein, but no such documents shall require Fort Scott to assume or incur any obligation, or to provide any representation or warranty, beyond that contained in this Agreement. Fort Scott shall co-operate with E-Com as reasonably required to secure execution of such documents by parties other than Fort Scott and E-Com.

4.3      All costs incurred in registering any conveyances and assignment of title to the Assets, and all costs of preparing and registering any further assurances required to convey the Assets, shall be borne by E-Com.

5.      ADJUSTMENTS AT CLOSING

5.1     benefits and obligations of any kind and nature accruing, payable or paid in respect of the Assets, including maintenance, development and operating costs and proceeds from the sale of production (if applicable), shall, subject to the provisions of this Agreement, be borne by Fort Scott up to the execution of this Agreement. All benefits and obligations of any kind and nature accruing, payable or paid in respect of the Assets, including maintenance, development and operating costs and proceeds from the sale of production (if applicable) after the execution of this Agreement are the responsibility of E-Com.

6.     FORT SCOTT’S REPRESENTATIONS

6.1      Fort Scott represents and warrants to E-Com that:

(a)

Each of Fort Scott and Frontier are, and at the Closing Date shall continue to be, corporations duly organized, validly existing and in good standing under the laws of the jurisdiction of incorporation and duly registered and authorized to carry on business in all jurisdictions where the Lands are located;

(b)

Frontier is a wholly-owned subsidiary of Fort Scott;

(c)

All necessary corporate action has been taken by Fort Scott and Frontier to authorize the execution, delivery and performance of this Agreement;

(d)

This Agreement has been duly executed and delivered by Fort Scott and, if properly executed and delivered by E-Com, constitutes a valid and binding obligation of Fort Scott and Frontier enforceable in accordance with its terms, and subject to the qualification that such enforceability may be limited by bankruptcy, insolvency, liquidation, reorganization or other laws of general application relating to or affecting rights of creditors;

(e)

To the best of the information, knowledge and belief of Fort Scott, there are no claims, proceedings, actions or lawsuits in existence, contemplated or threatened against or with respect to the Assets or the interests of Fort Scott therein;

(f)

To the best of the information, knowledge and belief of Fort Scott and Frontier, all royalties and rentals due under the said Leases and payable by Fort Scott or Frontier have been properly and timely paid; and

(g)

Neither Fort Scott nor Frontier have encumbered or alienated their interest in the Assets, and to the best of Fort Scott’s knowledge the Assets are now, and will be at the Closing Date, free and clear of all liens, encumbrances and adverse claims created by, through or under Fort Scott except as and if set forth the Participation Agreement. Except as expressly stated in this sub-clause, Fort Scott does not make or give any representation or warranty as to its title to the Assets.

7.     E-COM’S REPRESENTATIONS

7.1      E-Com represents and warrants to and with Fort Scott that:

(a)

at the Closing Date E-Com shall continue to be, a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and duly registered and authorized to carry on business in all jurisdictions in which the Lands are located;

(b)

all necessary corporate action has been taken by E-Com to authorize the execution, delivery and performance of this Agreement;

(c)

this Agreement has been duly executed and delivered by E-Com and, if properly executed and delivered by Fort Scott, constitutes a valid and binding obligation of E-Com enforceable in accordance with its terms, and subject to the qualification that such enforceability may be limited by bankruptcy, insolvency, liquidation, reorganization or other laws of general application relating to or affecting the rights of creditors;

(d)

E-Com shall assume all of Fort Scott’s obligations under the Participation Agreement and the Leases and shall fully satisfy the same, and hereby pledges all of its interest received herein from Fort Scott to and for the benefit of Fort Scott as security for the full and complete performance on all of its obligations and covenants made herein; and

(e)

E-Com is relying upon its own investigations concerning the title to and fitness of the Assets and is not relying upon any representations, warranties or statements in any form of Fort Scott except those contained in sub-clause 6.1(g) of this Agreement.

8.     MAINTENANCE OF BUSINESS

8.1     Until the Closing Date, Fort Scott shall continue to maintain the Assets in a proper and prudent manner in accordance with generally accepted industry practices.

8.2      From the date hereof until the Closing Date, Fort Scott and Frontier shall not enter into any obligations or commitments out of the ordinary course of business with respect to the Assets, except as may be reasonably necessary to comply with the terms of the Participation Agreement, or to preserve the Assets or title to the Assets. Until the Closing Date, Fort Scott and Frontier shall not, without the prior written consent of E-Com, propose or initiate the exercise of any right or option relative to or arising as a result of the ownership of the Assets, propose or initiate any operations on the Lands which have not been commenced or committed to by Fort Scott on the date hereof except that Fort Scott may propose or initiate any operations on the Lands for, and may propose or initiate the exercise of any right or option relative to, the preservation of any of the Assets.

9.     CONDITIONS TO THE CLOSING

9.1      It is a condition precedent of the Closing that any and all necessary regulatory or governmental approvals and consents required to permit the transaction to be completed shall have been obtained. Each of the parties covenants and agrees with the other to use all reasonable efforts to obtain any such approvals and consents.

9.2     It is a condition of the sale of Closing, for the benefit of Fort Scott, which may be waived at the discretion of Fort Scott, that the representations and warranties of E-Com in this Agreement remain true at the Closing Date.

9.3     It is a condition to the purchase of the Closing, for the benefit of E-Com, which may be waived by E-Com, that the representations and warranties of Fort Scott in this Agreement remain true at the Closing Date.

10.      THIRD PARTY RIGHTS AND CONSENTS

10.1     If any of the Assets are subject to a preferential right of purchase or similar restrictions, or require the consent of any third party, which are in either case made effective by virtue of this Agreement, then Fort Scott shall promptly serve all notices as are required under the preferential purchase or consent provisions. Each such notice shall include a request for a waiver of any preferential or similar right to purchase any of the Assets and for the granting of any consent that may be required. E-Com may not waive the existence or operation of any preferential or similar right to purchase any of the Assets. If the holder of any preferential or similar right to purchase any of the Assets exercises such right, or a third party required to give consent refuses to give such consent, then such right or refusal shall not be considered a defect of title and such Assets shall be excluded from the purchase and sale herein, and the purchase price to be paid by E-Com to Fort Scott pursuant to clause 2 hereof shall be reduced by an amount to be negotiated by the parties acting reasonably and without delay.

11.     AMOUNTS OWING AFTER CLOSING DATE

11.1     Any adjustment amounts owing to Fort Scott by E-Com after the Closing Date herein and remaining unpaid shall bear interest from the Closing Date to the date of payment at the rate of 2% per annum above the prime lending rate offered by HSBC to its major commercial clients by the main branch in Seattle, Washington. For greater clarity, such adjustment amounts do not include any payments regarding the purchase price.

12.     DATA/ PROJECTIONS

12.1     There is included among the materials pertaining to the Assets to be delivered or made available by Fort Scott to E-Com pursuant to this Agreement, including evaluations, projections, reports, interpretative or non-factual materials prepared by or for or received by Fort Scott (the “Asset Data”). E-Com hereby forever releases and discharges Fort Scott and Frontier from any claims and all liability to E-Com or E-Com’s assigns and successors as a result of the use or reliance upon such Asset Data. With respect to all materials, E-Com confirms that it is not relying upon any representations or warranties of Fort Scott except as specifically set forth in sub-clause 6.1(g) of this Agreement. Without limiting the foregoing, E-Com agrees that it shall rely solely on its own appraisal and estimates as to the quantum or value of the Assets and shall rely solely on its own geological and engineering interpretations and analyses related thereto.

13.     INDEMNITY

13.1     From and after the date hereof, E-Com will assume, perform and discharge all of the obligations and liabilities of Fort Scott in respect of the Participation Agreement and the Leases and agrees to indemnify and save harmless Fort Scott and Frontier from and against all claims, actions, suits, proceedings, demands, assessments, judgments, charges, penalties, costs, and expenses (including the full amount of any legal expenses invoiced to Fort Scott) made or claimed against or suffered or incurred by Fort Scott resulting from or arising out of or in connection with the failure by E-Com to assume, perform and discharge as aforesaid.

13.2      In addition to the foregoing, E-Com shall indemnify and hold harmless Fort Scott and Frontier from and against any and all liability relating to operations or reclamation on the Lands.

13.3      Such indemnities shall be deemed to apply to, and shall not merge in, all assignments, transfers, conveyances, novations and other documents, including the General Conveyance: Assignment of Leases, conveying the Assets to E-Com. Each party shall have full right of substitution and subrogation in and to all covenants and warranties by others previously given or made in respect of the Assets or any part thereof.

13.4     E-Com will observe and perform all obligations to be carried out by Fort Scott under the Participation Agreement as if it was an original party thereto. In the event E-Com is notified of, or is knowingly in breach of any of the terms, conditions or obligations arising under the Participation Agreement or this Agreement, E-Com will immediately upon becoming aware of such breach, and at all times prior to the expiration of any curative period, advise Fort Scott of the nature of the breach. Fort Scott shall have the right to cure such breach without notice to, or the consent of E-Com. If Fort Scott acts to cure the alleged or actual breach, then E-Com shall within 30 days of any such curative action reimburse Fort Scott for any and all direct and indirect cost, expenses, and fees or otherwise paid by or on its behalf, plus a penalty of equal to an additional 25% of such total amount.

14.     WAIVER

14.1     No waiver by any party of any breach of any of the terms, conditions, representations or warranties in this Agreement shall take effect or be binding upon that party unless the waiver is expressed in writing under the authority of that party and any waiver so given shall extend only to the particular breach so waived and shall not limit or affect any rights with respect to any other or future breach.

15.      FURTHER ASSURANCES

15.1      At the Closing Date and thereafter as may be necessary, the parties shall execute, acknowledge and deliver such other instruments and take such other action as may be reasonably necessary to carry out their obligations under this Agreement.

16.     ASSIGNMENT

16.1 Prior to the Closing Date, neither party may assign its interest in or under this Agreement without the prior written consent of the other party hereto, except as may be required by Fort Scott to comply with any preferential rights as described in clause 10 hereof.

17.      NOTICE

17.1      All notices required or permitted or with respect to this Agreement shall be in writing and shall be deemed to have been properly given and delivered when delivered personally or by courier, or when sent by registered mail (or by any other like method by which a written and recorded message may be sent), with all postage or charges fully prepaid, and addressed to the parties hereto, respectively, as follows:

To E-Com:	Suite 1925, 200 Burrard Street Vancouver, British Columbia V6C 3L6 Attention: Donald Sharpe Facsimile: 604.693.0179
To Fort Scott:	5548 Parthenon Place Vancouver, British Columbia V7W 2V6 Attention: Richard Coglon Facsimile: 604.638.3525

Any notice so mailed shall be deemed to have been given to and received by the addressee four (4) days after the mailing thereof, Saturdays, Sundays and statutory holidays excepted, provided that neither party shall use such mails for the giving of notice during the term of any strike or disruption, or threatened strike or disruption of postal service.

Either party may change its address for the purpose hereof by directing a notice in writing of such change to the other party at its above address.

18.     GOVERNING LAW

18.1     This Agreement shall in all respects be subject to and be interpreted, construed and enforced in accordance with the laws in effect in the State of Nevada. Each party accepts the jurisdiction of the courts of the State of Nevada and all courts of appeal therefrom.

19.     ENTIRE AGREEMENT

19.1      This Agreement supercedes all previous agreements and states the entire agreement between the parties concerning the purchase and sale of the Assets.

19.2      This Agreement may be amended only by written instrument signed by Fort Scott and E-Com.

20.     ENUREMENT

20.1     This Agreement shall be binding upon and enure to the benefit of the parties hereto and their respective successors and permitted assigns.

IN WITNESS WHEREOF the parties have executed this Agreement in accordance with their respective requirements therefor as of the date first above written.

E-COM TECHNOLOGIES INC.

Per: /s/signed
Authorized Signatory

FORT SCOTT ENERGY CORP.

Per: /s/signed
Authorized Signatory

SCHEDULE “A”

This is Schedule "A" annexed to and forming part of the Assignment Agreement between E-Com Technologies Inc. and Fort Scott Energy Corp., dated the 5th day of August, 2004.

PARTICIPATION AGREEMENT

Diamond Play, Nevada

This Participation Agreement for the Diamond Play, Nevada is entered into and made effective this 26th day of April, 2004, by and between Cedar Strat Corporation, a Nevada corporation (hereinafter “Cedar Strat”), and Fort Scott Energy Corporation, a Nevada corporation (hereinafter “Participant” or “Fort Scott”).

RECITALS

The parties recite and declare as follows:

A.     WHEREAS, in conjunction with this Agreement, the parties have entered into a Confidentiality Agreement, which is incorporated herein by reference.

B.     WHEREAS, Cedar Strat has developed at great time and expense certain geological, geophysical, technical, contractual and other data and information, including well logs, interpretative maps, land maps, license from third parties and other information related to the area included within the geographical boundaries of the Confidential area, as set forth in Exhibit “A” of the Confidentiality Agreement and described here as Township 15 N, Range 50 E through Township 33 N, Range 58 E from the Mount Diablo Meridian, Acreage lying within Elko, Eureka, Nye and White Pine counties of Nevada. Furthermore, Fort Scott covenants not to compete with Cedar Strat within the boundaries set forth in this paragraph without specific prior written approval, such approval not to be unreasonably withheld.

C.     WHEREAS, Cedar Strat has offered Participant the opportunity to participate in its Diamond Play (hereinafter “Play”), which lies within the boundaries of the non-compete area, as set forth in Exhibit “A” of the Confidentiality Agreement.

D.     WHEREAS, Participant has agreed to participate in the Play in accordance with the terms set forth in this Agreement and in the referenced Confidentiality Agreement.

E.     WHEREAS, Participant acknowledges that in agreeing to participate in the Play, not acting as an employee or agent of Cedar Strat, but as a separate entity which desires to participate with Cedar Strat in development of the Play.

NOW, THEREFORE, in consideration of the mutual covenants, conditions and promises contained herein, and other good and valuable consideration, the receipt and sufficiency that are hereby acknowledged, the parties agree as follows:

Section 1. Establishing an Area of Mutual Interest (AMI):

Cedar Strat and Fort Scott will establish an Area of Mutual Interest (AMI) surrounding the Diamond Play, as detailed in Exhibit “A” hereof. The area within the “Blue” boundaries constitute the AMI. Areas within the “Red” portion of the AMI boundary are subject to the right of first refusal by the Major Independent which language is included in Exhibit “C”. The boundaries of this “Red” portion of the AMI and right of first refusal by the Major Independent Oil and Gas Company is more fully described in Exhibit “B”. Acquisition of acreage within the “Blue” area of the AMI are also to be governed by the rights previously granted the Major Independent Oil and Gas Company under the terms discussed in Exhibit “C”.

Section 2. Participant Acquisition of Land/Leases:

Cedar Strat will identify the Bureau of Land Management (BLM) leases critical to the project, make recommendations to Fort Scott for additions or deletions thus maximizing the benefit of the acreage held, recognizing a need for protection acreage in addition to structure acreage (the “initial acreage”). The “initial acreage” is that acreage which has previously been nominated and passed through a BLM lease sale auction and is available at the BLM for lease. Cedar Stat will represent Fort Scott at the BLM lease sales if desired.

Fort Scott agrees to advance such monies as are required to acquire the “initial acreage”, as the case may be (the “initial payment”) and to further assume the obligation to pay the ongoing rentals on all such “initial acreage” (hereafter referred to as “subsequent payments”) for a period of two (2) additional years, excluding the “initial payment”. It is estimated that the “initial payment” will be in the order of $400,000 and that each additional annual “subsequent payment will be in the order of $400,000. The leases will be held in the name of Fort Scott Energy Company or an entity designated by Fort Scott.

Fort Scott will also assume the obligation to advance such monies as may be required to fund the purchase of the “after acquired acreage” which, assuming requires payment of a $2.00 per acre bonus fee and a $1.50 per acre rental fee, is estimated to total $460,000 (hereinafter referred to as the “Initial subsequent acreage fee”. In addition, Fort Scott will assume the obligation to pay the annual rental on such “after acquired acreage” for a period of two (2) additional years excluding the payment of the “initial subsequent acreage fee”. The “after acquired acreage” is that acreage which must be or has been nominated but has not passed through a BLM lease sale auction.

It is recognized that the bonus bid to the BLM may exceed the $2.00 per acre level. Fort Scott will bid as aggressively as they feel may be necessary to acquire the “after acquired acreage”. Should Cedar Strat be representing Fort Scott at such BLM auction, the level of potential bid will be established prior to the date of the auction.

It is recognized that certain acreage may have been previously leased or owned by outside entities, for which negotiations to control under this agreement will be embarked upon. All acreage acquired within the AMI will be entered into under the same terms of this agreement. If acreage of third party control must be acquired under terms that infringe upon this agreement, both parties will work as reasonably possible to acquire and control this acreage for the group.

The “Red” area designated in Exhibit “A” will be the priority area for acquisition of the primary acreage. Fort Scott will be under the same Right of First Refusal clause for this project as Cedar Strat is with the Major Independent Oil and Gas company. (see Exhibit “C”).

Section 3. Ownership of data and use of data in Play:

Cedar Strat will retain ownership of all data whether currently owned, purchased, licensed or generated by Cedar Strat, and as may be hereafter generated, or acquired as part of the exploration programs set out in section 4 hereof. Cedar Strat will, at no additional cost to Fort Scott et al., license its proprietary and other relevant data to Fort Scott and any other participant for the duration of the Play. Certain data that Cedar “Strat licenses frorl-i third pat-ties will remain in the name of Cedar Strat but utilized for the efficient development of the Play. All data in the possession or control of Cedar Strat relevant to the Play will be made available to the Participant for study and analysis on a time is of the essence basis. All maps, data and graphs generated or purchased will be used for the efficient development of drill sites, the marketing of the Play when appropriate, or drilling as mutually agreed upon.

Cedar Strat will keep newly developed data over the Diamond Play and the AMI confidential, on a case by case basis for each lease involved, for a period of a) two years from the effective date of this agreement on acreage Fort Scott chooses to farm out without further participation, b) five years from the effective date of this agreement on acreage Fort Scott proceeds for test well and development drilling, or c) until such time as Fort Scott elects to relinquish a specific lease. Data over leases relinquished will be free of liens, claims, overrides and back-in interests and will be available for marketing such relinquished leases to additional third party industry participants.

Fort Scott has anticipated the shooting or acquisition of additional seismic data, other than the Exxon Seismic data, as part of the exploration and development of this Play. Fort Scott shall retain ownership of that data. Fort Scott will, at no additional cost to Cedar Strat et al., license its proprietary seismic data to Cedar Strat for the duration of the Play.

The ownership of data is more fully detailed as a part of Exhibit “E”'.

Section 4. Exploration of the Diamond Pl@a .

Fort Scott will, in each of the first two years of the agreement, commit to expending the exploration monies as presented in Exhibit “D” which are required to better understand, explore and assess the viability of the lands comprising the Diamond Play for the existence of hydrocarbons and for prospective drill targets. The details of each such task is subject to further delineation as may reasonably be required by the parties going forward. The relevant geologic data which will be developed, analyzed and used for this exploration effort and delivered to Fort Scott by Cedar Strat will include but is not limited to:

- New Geologic mapping, including field work and office/computer plotting and analysis

- Biostratigraphic sample collection — Paleontologist analysis,—Well Studies,—Aeromagnetic and Gravity Surveys,

- Attempt for Acquisition and processing of Exxon seismic Data

- Management of Prospect Development

- Development of cross sections,

- Map production,

- Home Office support,

The cost of the Exploration Program is budgeted to be $1,500,000 as outlined in Exhibit “D”. Fort Scott will work with Cedar Strat under the terms of the Management Services Agreement as described in Exhibit “D” for the exploration and development of the Diamond Play.

In the event of additional expenses not reasonably contemplated in this agreement, Participant will use its best efforts to fund the purchase, license or expense, with such additional advances being repaid in accordance with Section 6.1(d) hereto (the “additional expenses”). Such items of additional expense may include but are not limited to the acquisition of additional seismic data, sales trips to market working interest shares on behalf of Fort Scott, status report trips and licenses from third parties for data to be held by Participant redundant to that held by Cedar Strat for exploration activities. All such additional expenses shall be subject to the prior written approval of Fort Scott and shall be reimbursed by Fort Scott as to 100% in accordance with section 6.1(d) or 6.2(b), as the case may be.

Section 5. Relinquishment of land/leases by Participant in the Diamond Play:

Leases or land will not be relinquished without the mutual consent of Cedar Strat and Fort Scott. In the event Fort Scott elects to surrender or abandon the Leases, or any portion thereof, without prior approval of Cedar Strat, Fort Scott shall give Cedar Strat 60 day’s prior written notice thereof. Cedar Strat shall thereafter have the option to require Fort Scott to reassign that portion thereof which Fort Scott wishes to surrender or abandon. This abandonment will be without liens, claims, royalties, back-in interests or any such encumbrances. Cedar Strat will receive the assignment without liability other than paying the future rentals. Cedar Strat will be allowed to seek after and acquire other industry participants to develop said area. Fort Scott will immediately turn over the data and work product created by Cedar Strat or licensed by Cedar Strat in the development of said leases.

Section 6. Election by Participant to Develop the Diamond Play:

Assuming that the work on the Play is being acquired, processed and assessed in a timely manner which allows Fort Scott and Cedar Strat to determine the viability of the Diamond Play for hydrocarbons and the identification of prospective drilling targets, Fort Scott may then at any time during the initial two years of the agreement, elect in writing (the “election”) to proceed with the development of the Diamond Play. If Fort Scott’s ability to assess the viability of the Play is delayed due to delays outside of its control, the election will be extended for such period of time as the parties may agree acting reasonably.

Section 6.1. Election by Participant to proceed with Development of the Diamond Play subsequent to the two year Exploration period:

a)     In the case of a positive election for Fort Scott to develop the area by drilling wells, the election will, unless extended by the parties acting reasonably, be made in writing within two years from the date of this agreement.

b)     Two wells will be drilled, the first in the 12 months after the initial two year exploration phase of this agreement, unless extended by the parties acting reasonably, the next in the succeeding 12 months, to the shallower of the base of the sub-thrust Devonian Simonson formation or a depth of 17,000 feet. Rental payments on the initial acreage and subsequently acquired acreage will be maintained by Fort Scott during this two year development period.

C)     Fort Scott shall receive 82.5% Net Revenue Interest (NRI) in the identified prospects of the Diamond Play such that Cedar Strat retains a 5.0% ORRI and a 5% carried back in working interest.

d)     If Fort Scott makes the election set out in Section 6.1, the seed money (exploration) funds for their proportionate interest will be reimbursed 100% from production and the development (drilling to on-site tanks) expense will be reimbursed 100% before Cedar Strat’s back-in interest becomes effective.

Section 6.2. Election by Participant not to Participate in Development of the Diamond Play:

a)     In the case of an election by Fort Scott not to participate in the development of the Diamond Play, the election will be made in writing within two years from the date of this agreement unless extended by the parties acting reasonably.

b)     If Fort Scott does not elect to proceed with the development of the Diamond prospect, then Fort Scott and Cedar Strat will use their collective reasonable best efforts to sell the Diamond Play as prospects for development, in whole or in part. Any and all “Prospect and other fees” to be paid by any third party for the right to participate or in the development of the diamond prospect or portion thereof hereunder, shall be paid firstly to Fort Scott in an amount equal to 75% of all lease acquisition, lease rentals, lease maintenance, and seed (exploration) monies advanced on or in respect of that portion of the Diamond Prospect being sold, except as it relates to the payment of the delay rentals on the “initial acreage” or the “after acquired acreage” made after the expiry of the first two years of the initial agreement, and the “additional expenses”, all of which will be reimbursed at 100%. Thereafter, all such “prospect and other fees” to be paid by or in respect of the Diamond Prospect or portion thereof shall be split 50/50 as between Fort Scott and Cedar Strat.

c)     On any acreage sold to third party industry participants or farmed out, Fort Scott will retain a 2.5% ORRI and Cedar Strat will retain a 5.0% ORRI.

d)     Any prospect being sold or farmed out to third parties will include a 17,000 foot well commitment to be completed within two years from the date of sale and include the ORRI and back-in interest as described in this agreement. The third party industry participant will be liable for making the rental payments over the leases acquired for the period covering two years during which the test well must be drilled.

(f)     If a prospect is thereafter marketed to third party industry participant by Cedar Strat, Cedar Strat shall at all times preserve a 12.5% back-in carried working interest for Fort Scott. This back-in interest (BI) will be increased if any amount of back-in is retained over 17.5%. Amounts retained over 17.5% will be split 50/50 with Fort Scott and Cedar Strat. If there is less than 17.5% back-in interest retained it will come first out of Cedar Strat’s interest and in no case will it be allowed to erode Fort Scott’s 12.5% back-in interest. If Fort Scott does 100% of the marketing, Cedar Strat will receive a minimum of 5% back-in carried interest.

Section 7. Notices.

Notices shall be given a) by personal delivery to the other Party, b) by facsimile, with a copy sent by registered or certified mail, return receipt requested, or c) by registered or certified mail, return receipt requested. All notices shall be effective and deemed delivered a) if by personal delivery, on the date of delivery if during business hours, otherwise the next business day, b) if by facsimile, on the date the facsimile is received if received during business hours, c) if solely by mail, upon receipt by the addressee. Any Party may from time to time change its address hereunder by written notice to the other Party. The Party’s addresses are as follows:

Fort Scott Energy Company200
Burrard Street, Suite 1925Vancouver,
B.C. Canada V6C 3 L6Attn:
Richard Coglon, Donald Sharpe
Phone: 604-693-0177Fax:
604-638-3525

Cedar Strat Corporation
948 Temple View Drive
Las Vegas, NV 8 91 1 0
Attn: Alan Chamberlain
Phone: 702-459-3703
Fax: 702-459-4503

Section 8. Governing Law.

This Agreement shall be construed in accordance with, and governed by the substantive and procedural laws of, the State of Nevada, without reference to principals governing choice or conflict of laws. The parties agree that as a material part of the consideration of the rights and obligations of the parties pursuant to this Agreement and because Cedar Strat maintains its business office and records in Clark County, Nevada, that in the event any litigation arises between the parties or becomes necessary for Cedar Strat to commence a lawsuit, the exclusive jurisdiction for all legal proceedings and lawsuits between the parties is the Eighth Judicial District Court of the State of Nevada in and for the County of Clark. The parties hereto further agree to submit to the jurisdiction of said Eighth Judicial District Court and waive any rights they may have to change, transfer, or in any manner remove the venue from said court to any other jurisdiction or venue.

Section 9. Representations and Warranties.

By execution of the Agreement each signatory represents and warrants that:

(a)     The Agreement is executed on behalf of an individual or a valid and existing legal entity;

(b)     Such individual or entity has the full right and authority to undertake any action contemplated by the Agreement;

(c)     The execution of the Agreement has been duly and properly authorized by the party on whose behalf said Agreement is executed in accordance with all applicable laws, regulations, agreements or procedures governing the authority of such person or entity to execute the Agreement on behalf of such parties;

(d)     The consents of all persons or entities whatsoever necessary to the execution of the Agreement have been obtained; and

(e)     The parties shall indemnify each other, their successors and assigns against any and all damages, including costs and reasonable attorney fees resulting from any breach of any representation, warranty or agreement set forth herein.

Section 10. Miscellaneous.

(a)     In the event of a dispute between the parties arising under this Agreement, or in the even of an action brought to enforce the terms of this Agreement, the prevailing parties shall be entitled to the recovery of reasonable attorney fees and reasonably incurred costs and expenses of litigation.

(b)     If a court of competent jurisdiction shall find any provision of this Agreement unenforceable under Nevada law, such provisions shall be stricken and the remainder of the Agreement shall remain in full force and effect.

(c)     It is the intent of the parties hereto to use their respective reasonable best efforts to prepare and circulate for signature a definitive form of agreement in respect of the subject matter hereof If for any reason such an agreement is not circulated or agreed to then it is agreed that this Agreement is intended by the parties to be the final expression of their agreement with respect to the subject matter hereof, and is intended as the complete and exclusive statement of the terms of the agreement between the parties. As such, this Agreement will in such an instance constitutes the entire agreement between the parties, whether oral or written, with respect to the subject matter hereof and may only be modified by subsequent writing duly executed by both parties.

(d)     The singular shall be interpreted as the plural and vice versa, if such treatment is necessary to interpret the Agreement in accordance with the manifest intention of the parties hereto. Likewise, if either the feminine, masculine or neutered gender should be one of the other genders, it shall be so treated.

(e)     Each party agrees to execute all documents necessary to complete the transactions contemplated herein.

(f)     This agreement may be assigned, in whole or in part, by Fort Scott to a corporate or other entity, which at the time of, or as a result of any such assignment, is controlled, directly or indirectly, by Don Sharpe or Richard Coglon, either collectively or in the aggregate. For the purpose of this provision, “controlled” means voting control of 51 % or more of the voting shares of the said corporate entity. Any such assignments will be binding at law and at equity upon the parties hereto as if the assigned party was a signatory to this Agreement in the first instance.

(g)     This agreement will become effective within five business days of the receipt by the parties of a notice from the “Major Independent” referred to in Schedule “C” of its intent not to exercise its Right of First Offer and its Right of First Refusal (ROFR) on the Play.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year set forth in the first portion of this Agreement.

Dated this 26th day of April, 2004.

Cedar Strat Corporation
By: /s/Harold A. Jacobsen
Name (printed): Harold A. Jacobsen
Its: Chief Financial Officer
Witnessed by: /s/Elena Lehman
Name (printed): Elena Lehman

Fort Scott Energy Corporation
By: /s/Richard Cohlon
Name(printed): Richard Coglon
Its: President
Witnessed by: /s/Donald A. Sharpe
Name (printed): Donald A. Sharpe

EXHIBIT “A”

Participation Agreement
Between Cedar Strat Corporation and Fort Scott Energy Corporation
Diamond Play, Nevada, Area of Mutual Interest

all other documents and instruments as E-C